Consumer sentiment improved for the fourth straight month in November, according to the University of Michigan Surveys of Consumers.
The index of consumer sentiment increased 3.5 percent to 73.0 from 70.5 in October, according to the report. While current conditions were essentially unchanged, the expectations index increased to its highest reading since July 2021, up 6 percent to 78.5 from 74.1 in October. The expectations index has increased 38.2 percent from November 2023.
Expectations for personal finances increased 6 percent, due partially to improving income prospects. Short-term business conditions increased 9 percent in November. Long-term business conditions increased to its best reading in nearly four years. Sentiment is 50 percent higher than its low in June 2022 but is below pre-pandemic readings.
Year-ahead inflation expectations fell to 2.6 percent from 2.7 percent in October. Long-term inflation expectations increased to 3.1 percent in November from 3 percent the previous month. “The current reading is the lowest since December 2020 and sits within the 2.3-3.0 percent range seen in the two years prior to the pandemic,” said Surveys of Consumers Director Joanne Hsu.
Rising consumer sentiment was also reflected in October’s Conference Board Consumer Confidence Index, which increased to 108.7 from 99.2 in September. The index based on consumers’ assessments of current labor market and business conditions increased 14.2 points to 138.0. The index based on consumers’ short-term outlooks for income, business and labor market conditions increased 6.3 points to 89.1, higher than the threshold of 80 that typically signals a recession ahead.
“Consumer confidence recorded the strongest monthly gain since March 2021, but still did not break free of the narrow range that has prevailed over the past two years,” said The Conference Board Chief Economist Dana Peterson.
